Computer Sciences Corporation (CSC) recently announced that it has won a contract extension from Bermuda-based Northstar Financial Services Ltd. According to the contract, the financial details of which were kept confidential, Computer Sciences will continue to provide its business process outsourcing (BPO) services to Northstar for an additional 5-year period.
Northstar is a renowned financial planning solutions provider for non-U.S. citizens. The company offers a host of insurance, investment and annuity-based products targeting the financial security of its specific client base. The company currently manages $500 million worth of assets in Bermuda.
Computer Sciences’ BPO services have enabled Northstar to efficiently float new investment products and also take care of its existing customers. Since the increased efficiency translated to lower operating expenses, Northstar was encouraged to go for an extension.
Last week, Computer Sciences won two other contracts. The company’s Enterprise Scheduling solution (a healthcare suite) was chosen by a Singapore-based multi-disciplinary hospital, Tan Tock Seng Hospital. Also, the Federal Aviation Administration agency of the U.S. Department of Transportation opted for Computer Sciences’ cloud-based solution to optimize its Enterprise Messaging System.
The deal value was $91.0 million. Apart from this, Computer Sciences also won a multi-year contract extension from Safety Insurance Group for an undisclosed sum.
Deal wins are catalysts for any company, and Computer Sciences has no dearth of them. Moreover, the company has contracts from different industry verticals. But the growing uncertainty regarding the U.K. National Health Service contract, intense competition in the IT and cloud computing space from both small and big players such as Accenture plc (ACN) and Hewlett-Packard Company (HPQ), its European exposure and strained federal budgets have prompted our bearish outlook on the stock.
Currently, CSC holds a Zacks #4 Rank (implying a short-term Sell rating).
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